Yes Devices has forecast its Total Funds Requirement for the coming year as shown in the following table. Month Amount Month Amount January $2,000,000 July $12,000,000 February 2,000,000 August 14,000,000 March 2,000,000 September 9,000,000 April 4,000,000 October 5,000,000 May 6,000,000 November 4,000,000 June 9,000,000 December 3,000,000 A. Assuming that Short-Term Funds cost 12% annually and that the Cost of Long-Term Funds is 17% annually, calculate the Total Cost of the Aggressive Strategy. B. Assuming that Short-Term Funds cost 12% annually and that the Cost of Long-Term Funds is 17% annually, calculate the Total Cost of the Conservative Strategy. C. Divide the firm’s monthly funds requirement into (1) a permanent component and (2) a seasonal component, and find the monthly average for the Seasonal components.
Yes Devices has
|
Month |
Amount |
Month |
Amount |
|
January |
$2,000,000 |
July |
$12,000,000 |
|
February |
2,000,000 |
August |
14,000,000 |
|
March |
2,000,000 |
September |
9,000,000 |
|
April |
4,000,000 |
October |
5,000,000 |
|
May |
6,000,000 |
November |
4,000,000 |
|
June |
9,000,000 |
December |
3,000,000 |
A. Assuming that Short-Term Funds cost 12% annually and that the Cost of Long-Term Funds is 17% annually, calculate the Total Cost of the Aggressive Strategy.
B. Assuming that Short-Term Funds cost 12% annually and that the Cost of Long-Term Funds is 17% annually, calculate the Total Cost of the Conservative Strategy.
C. Divide the firm’s monthly funds requirement into (1) a permanent component and (2) a seasonal component, and find the monthly average for the Seasonal components.
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